Saturday, July 31, 2010

Sam and Charles Wyly, billionaire Texas brothers who gained prominence spending millions of dollars on conservative political causes, committed fraud by using secret overseas accounts to generate more than $550 million in profit through illegal stock trades, the Securities and Exchange Commission charged Thursday.

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According to the SEC, the brothers, who live in Dallas, created an elaborate and clandestine network of accounts and companies on the Isle of Man and in the Cayman Islands. The brothers then used these accounts and companies to trade more than $750 million of stock in four public companies on whose boards they served, not filing the disclosures required for corporate insiders, the SEC said.

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The SEC says that by using offshore accounts to trade shares of these public companies, the Wylys were able to escape filing the regulatory disclosures required of board members when they buy or sell shares.

By keeping their trading activity secret, the Wylys deprived outside investors of information they could use "to gauge the sentiment of public companies' insiders and large shareholders about the financial condition and prospects of those companies," the SEC said.

Wyly? Because we can get away with it when the Republicans are in charge.

The article mentions another fraud for which the Wylys were never prosecuted:

In 2004, the Wylys helped fund Swift Boat Veterans for Truth, another third-party organization that ran controversial television ads attacking the military record of Sen. John F. Kerry (Mass.), Bush's Democratic opponent.

And the Wylys have a teabag connection:

Their biggest beneficiaries include three Texas Republicans, Sen. Kay Bailey Hutchison, National Republican Congressional Committee Chairman Pete Sessions and former House Republican leader Richard K. Armey, according to the Center for Responsive Politics analysis. The Wylys also have given to Senate Minority Leader Mitch McConnell (Ky.), former New York mayor Rudolph W. Giuliani and many other members of the GOP.

The fake grassroots will be thinner than Dick Armey's real hair if the Wylys do time.

The Wylys deny all charges, saying they relied on the advice of attorneys. One of their attorneys is also charged in the scheme.